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Women Only 8% of Internet Start-Up Founders

Last week, private investment research firm CB Insights released Part one of their Venture Capital Human Capital Report. Part one of the report revealed some interesting statics on the demographics of founders including age, race, and experience. Part two of the report covers gender and education. As in Part one, Part two also covers the first six months of the fiscal year (Jan-Jun 2010) and focuses on Internet companies that secured their first round of funding. To further narrow the study, the geographical locations are focused on The Big Three in Internet funding: California, Massachusetts, and New York.

According to the report:

Nationally women make up 8% of company founders with the highest concentration of female founders located in Massachusetts with about a 1/3 of all founding teams being completely female.

While the majority of founding teams are all-male, mixed gender teams received more funding overall, with mixed teams being awarded on average $4M compared to $.2.2M for both all-male and female founding teams.

Nationwide, the majority of founders (55%) have earned their MBA, 32% have earned a MS, while 4% have both.

Founders with MBAs are awarded the highest amount of funding at a median of $2.8M. Founding teams with MS received on average $2.5M and teams with MBAs and MS finished with $1M.

The report also revealed some of the top schools that founders attend. The majority of founders attended school on the East Coast for undergraduate with New York edging out California 15% to 11%. Of the ivy league schools, Cornell and Stanford were at the top of the heap 11 attendees each. Harvard, University of Illinois, and University of Pennsylvania rounded out the top five with 8,7, and 6 attendees respectively. Harvard became the top school for founders that pursued an advanced degree with 17 attendees. Stanford took second with 14, while MIT took third place with 12 graduates.

So what does this mean? Similiar to Part one of the report, investors seems to place more weight on experience, favoring companies with founders that have earned advanced degree. Investors also seem more comfortable investing their money with companies that have a strong business background rather than a science pedigree.

As far as equal representation, women and minorities while present in the industry, remain outsiders looking in receiving less funding than their all-male, white and Asian counterparts. Although this trend is evident throughout many industries from the boardroom down, it is still vital to the survival of the American business landscape that all voices be heard moving forward.

Comments

This article by Mike Cassidy talking to Carol Realini (http://www.mercurynews.com/mike-cassidy/ci_1568…) frames the situation as a numbers game, and that women are finally putting themselves in the game: becoming tech startup founders and going after venture capital. Over time, the numbers will turn in our favor.

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